The service would be cheaper because the cost of phone (however small it is) is eliminated from the picture.

Now, this could happen only in fiercely competitive market where service providers have to fight for each and every customer. From everything that is said it seems to me obvious that neither Sweden, nor Canada, are blessed with that situation.

They fight top get customer and lock them in. So it is cheaper when you become locked in. Why should it be cheaper when there is no lockin?

And of course a sim card without phone does not cost as much as a simcard with a phone. But if you buy the simcard together with a phone the non-phone cost is usually the same or cheaper than buying just a sim card. Which is perfectly reasonable since when you buy a simcard you can change the service provider whenever you want if you have an unlocked phone.